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2023 (2) TMI 346 - AT - Income TaxUnexplained cash credit u/s.68 - Unexplained entry in the books of accounts brought to tax - double taxation - taxing the source of investment and application of investment both - HELD THAT:- In Assessment Year 2012-13, the assessee had shown a sum as agricultural income and the advance received in respect of lease of lands does not appear in the balance sheet as on 31.3.2012. It is thus clear that what was shown as advance in the balance sheet in Assessment Year 2011-12 as on 31.3.2011 a part of it was shown as agricultural income by the assessee in Assessment Year 2012-13. Therefore, the contention of the assessee that the sum declared as agricultural income was on the opening balance of 31.03.2011 of leased lands received in respect of Manepalli lands is correct. The contention of the assessee that the same income which was taxed in Assessment Year 2011-12 against sought to be taxed in Assessment Year 2012-13 is factually found to be correct. The plea of the learned counsel for the Assessee rest on the theory of Telescoping. If income is available to an Assessee, then that income can be explained as a source for an item of investment or expenditure that the Assessee is unable to explain, provided the income was available to the Assessee when the investment or expenditure is made/incurred. The idea is ultimately tax is levied either only on the income or only on its application. The theory operates on the basic presumption that when there are undisclosed income and also certain undisclosed investments, then it could be reasonably presumed that the undisclosed investments have been sourced out of the undisclosed income, so that only the income may be taxed or only the investment may be taxed and not both, in the hands of the assessee under the provisions of the Act. When an income is taxed / addition is made to taxable income in an earlier year, the assessee may claim that the income arising in subsequent year / subsequent period is sourced out of the income taxed earlier. AO and the CIT(A) have proceeded on the presumption that the assessee is claiming credit on the agricultural income declared in Assessment Year 2011-12 is factually incorrect. The credit is claimed only for the advance shown in the balance sheet that was treated as unexplained credit under section 68 - Decided in favour of assessee.
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